Abstract

The E-Merkato digital marketplace is an innovative initiative set to transform the traditional
commerce landscape in Ethiopia. Focused on enhancing transparency, accessibility, and
efficiency, E-Merkato addresses challenges inherent in conventional markets like the iconic
Mercato. With a user-friendly pricing model catering to sellers, buyers, and delivery entities, the
platform aims to provide a seamless and inclusive marketplace experience. The feasibility of the
project is grounded in a thorough analysis of market dynamics, technological readiness, and
strategic stakeholder engagement. By proactively identifying and addressing potential risks
through robust contingency plans, E-Merkato positions itself as a resilient and adaptive solution.
As the project unfolds, it symbolizes Ethiopia's embrace of technological progress and economic
growth, marking a pivotal moment in the evolution of the nation's commerce landscape.

Key words

● E-Merkato ● Feasibility
● Digital Marketplace ● Stakeholder Engagement
● Ethiopia ● User-Friendly
● Commerce Transformation ● Inclusive Experience
● Transparency ● Risk Management
● Accessibility ● Contingency Plans
● Efficiency ● Technological Readiness
● Traditional Markets ● Economic Growth
● Mercato ● Innovation
● Pricing Model ● Digital Progress

Table Content
Table Content 1
List of Tables 2
List of Figures 3
Abstract 4
Chapter One 5
1 Introduction 5
1.1 Background of the project 5
1.2 Team composition 5
1.3 Task and Schedule of the Project 6
1.4 Statement of the problem 6
1.5 Objective 7
1.5.1 General objective 7
1.5.2 Specific objective 7
1.6 Scope of the project 8
1.7 Significance of the project 8
1.8 Feasibility of the project 9
1.8.1 Technical feasibility 9
1.8.2 Operational Feasibility 9
1.8.3 Economic Feasibility 9
1.9 Target beneficiaries of the system 10
1.10 Methodology for the project 10
1.10.1 Data Sources 10
1.10.2 Fact finding techniques 11
1.11 Development tools 12
1.11.1 Hardware Requirements 12
1.11.2 Software Requirements 12
1.12 Testing procedures 13
1.13 Limitation of the project 14
1.14 Cost of project 14
1.15 Implementation 15
1.16 Risks & contingencies 15
Introduction
In an era of rapid technological advancement, Ethiopia is actively embracing digital
payment solutions such as telebirr, kacha, chapa, m-pessa, e-birr, among others. These
innovations signify a monumental shift in the country's economic landscape.
Recognizing the pivotal role these digital payment systems play in modern transactions,
we introduce E-Merkato, a groundbreaking digital platform poised to revolutionize
Ethiopian marketplaces. Our platform offers virtual shop rentals, facilitating nationwide
delivery, and providing targeted advertising opportunities. E-Merkato is more than just a
marketplace; it is a dynamic ecosystem designed for sustainability and profitability. By
seamlessly integrating with existing digital payment systems, E-Merkato connects
sellers, buyers, and delivery partners in a harmonious network, redefining the way
commerce is conducted in Ethiopia. With a commitment to fostering economic growth
and technological advancement, E-Merkato stands as a catalyst for a more
interconnected and efficient marketplace in the digital age.

Background

Mercato, located in the heart of Addis Ababa, Ethiopia, is not only the largest
open-air market in the country but is often regarded as the largest in all of
Africa. Its sprawling expanse covers several square miles and is a bustling
hub of economic activity. The market is a labyrinthine network of vendors,
stalls, and shops that weave through streets, creating an intricate tapestry of
commerce. The vibrancy of Mercato lies not just in its sheer size but in the
diversity of goods and services it offers.
Home to an estimated 13,000 people operating in around 7,100 business
entities, Mercato is a melting pot of entrepreneurial endeavors. The market
attracts sellers and buyers from various walks of life, offering a vast array of
products, from traditional handicrafts and textiles to spices, produce,
electronics, and much more. The market's labyrinthine nature adds an
element of adventure to the shopping experience, as visitors navigate through
its winding alleys and discover hidden gems.

The streets surrounding Mercato are in a perpetual state of activity and

congestion. Whether it's the honking of taxis, the maneuvering of buses, or
the quick pace of pedestrians, the area exudes a lively energy. Despite the
chaos, Mercato remains an essential economic and cultural landmark in Addis
Ababa. For both locals and visitors, it's a place where one can experience the
authentic pulse of Ethiopian commerce and immerse themselves in the rich
tapestry of the country's cultural and economic heritage. The market is not just
a place to buy and sell; it's a dynamic ecosystem that reflects the resilience,
resourcefulness, and entrepreneurial spirit of the Ethiopian people.

Problem Summary

The Mercato open-air market in Addis Ababa, Ethiopia, grapples with significant challenges that
hinder its efficiency and effectiveness. The sprawling market, considered Africa's largest, faces
issues of congestion, lack of organization, and limited navigability due to its vast expanse. The
absence of a structured system for virtual representation of businesses within Mercato leads to
difficulties in product discovery for buyers and hampers the visibility of sellers. Additionally, the
reliance on traditional payment methods and the absence of streamlined transaction mechanisms
contribute to an overall lack of transparency and efficiency within the marketplace. These
challenges collectively create an environment that poses obstacles for both sellers and buyers in
Mercato.

Proposed Solution
 E-Mercato presents an innovative and holistic solution to the inefficiencies plaguing traditional
marketplaces, notably Mercato, in Ethiopia. By embracing digitization, the platform not only
introduces virtual shop rentals for sellers but also seamlessly integrates delivery services,
unlocks targeted advertising opportunities, and streamlines transactions between buyers and
sellers. This multifaceted approach addresses the core challenges of transparency, accessibility,
and efficiency in commerce. Through E-Mercato's transformative features, the marketplace
undergoes a paradigm shift, fostering a more connected, accessible, and streamlined ecosystem
that empowers both sellers and buyers in Ethiopia.

Service Feature Benefit for Client

Enhanced Visibility: Sellers can showcase products effectively, reaching a

Virtual Shop Rentals broader audience beyond the physical marketplace.

Convenient Shopping: Buyers experience seamless and efficient delivery,

eliminating the need to navigate through the congested streets of Mercato.
Nationwide Delivery Services
 Increased Sales Opportunities: Sellers can target specific audiences,
Targeted Advertising maximizing the impact of their advertising efforts and boosting sales.

Secure and Streamlined Transactions: Both buyers and sellers benefit from
modern digital payment systems, ensuring secure and efficient financial
Digital Payment Integration transactions.

Improved Accessibility: The virtual marketplace transcends physical

boundaries, making it easier for buyers to explore a diverse range of
Virtual Marketplace Access products from the comfort of their location.

E-Mercato's comprehensive service features provide tangible benefits for clients, ranging from
enhanced visibility for sellers to a more convenient and secure shopping experience for buyers.
The platform addresses the challenges of Mercato by leveraging these features to create a more
transparent, accessible, and efficient pricing marketplace for all stakeholders involved.

Pricing Information
The pricing system of E-Merkato is designed to be straightforward and tailored to the specific
needs of users, whether they are sellers, buyers, or delivery entities:

● Seller’s Pricing: Sellers have the option to choose between two methods of pricing based
on their preferences and business model. They can opt to pay per listed product, with a
fixed rate of 2 birr per good. Alternatively, sellers can choose a monthly subscription
model, paying a flat fee of 2000 birr per month. This provides flexibility for sellers with
varying inventory sizes and sales volumes.

● Buyer Pricing: Buyers are offered two types of accounts - a limited version accessible at
no cost, and a premium version. To unlock the premium version and access additional
features such as ad-free browsing, buyers are required to make a one-time payment of
 100 birr. This ensures that buyers have the flexibility to choose the level of service that
best suits their needs.

● Delivery Pricing: Persons or entities involved in delivery services are charged a

straightforward rate based on the weight of the goods they transport. With a fixed rate of
1 birr per kilogram loaded onto their trucks, this pricing model ensures transparency and
fairness in the calculation of delivery costs.

● Promotion Pricing: Sellers have the opportunity to enhance the visibility of their products
through promotional services offered by E-Merkato. The pricing for promotions is
determined by factors such as the duration of the promotion and the number of views it
receives. For instance, a 30-second promotion with 1000 views would cost 500 birr. This
allows sellers to tailor their promotional strategies according to their specific marketing
goals and budget constraints.

Proposed Schedule

Project Activity Date of Completion

Design backend and frontend 2 months

Backend and Frontend development 5 months

Integration & system testing 1 month

Acceptance testing 15 days

total months 8 months and 15 days

Significance of the project

The E-Merkato project holds significant value for the Ethiopian marketplace, particularly
addressing challenges within traditional markets like Mercato:

● Market Transformation: E-Merkato introduces a digital platform that aims to transform

traditional marketplaces, offering a solution to inherent inefficiencies and limitations,
thereby modernizing the buying and selling experience.
● Enhanced Efficiency: By incorporating features such as virtual shop rentals, nationwide
delivery services, and targeted advertising, E-Merkato streamlines transactions and
business operations, improving overall efficiency for both sellers and buyers.
● Digital Integration: The project plays a crucial role in bridging the gap between
traditional markets and the digital era. The integration of modern digital payment systems
facilitates secure and convenient financial transactions, aligning the marketplace with
contemporary technological trends.
● Economic Impact: E-Merkato's success could contribute significantly to the economic
development of Ethiopia. By empowering local businesses and providing consumers with
a more accessible and efficient marketplace, the project has the potential to stimulate
economic growth.
● Technological Advancement: The significance of E-Merkato extends beyond
commerce, symbolizing a leap into the digital age for Ethiopia. This initiative showcases
the country's embrace of technological advancements, positioning it on the forefront of
innovation in the African marketplace landscape.

Feasibility of the project

The feasibility of the E-Merkato project is grounded in a comprehensive analysis of its key
components, market dynamics, and potential impact on various stakeholders:

● Market Demand: There is a palpable demand for a digital marketplace solution in

Ethiopia, as evidenced by the challenges faced in traditional markets like Mercato. The
increasing adoption of digital payment systems and a growing tech-savvy population
create a conducive environment for the success of E-Merkato.
 ● Technological Infrastructure: Ethiopia's evolving technological landscape supports the
feasibility of E-Merkato. The widespread use of mobile phones and internet connectivity,
coupled with a gradual shift toward digital payments, provides a solid foundation for the
implementation of a digital marketplace.
● Stakeholder Engagement: The project's success relies on active engagement from both
sellers and buyers. A comprehensive onboarding process and awareness campaigns can
foster stakeholder participation. Feedback loops and continuous improvement
mechanisms can be implemented to ensure ongoing support.
● Regulatory Landscape: A thorough understanding of and compliance with the
regulatory framework governing e-commerce and digital payments in Ethiopia is crucial.
Collaborations with relevant authorities can help navigate potential regulatory challenges
and ensure the project's alignment with legal requirements.
● Financial Viability: The pricing structure, encompassing seller fees, buyer subscriptions,
and promotional pricing, should be meticulously designed to ensure the financial viability
of E-Merkato. A well-thought-out revenue model and cost management strategy
contribute to the sustainability of the project.
● Competition and Market Positioning: An analysis of potential competitors and a clear
market positioning strategy are essential. Identifying unique selling points, offering
competitive pricing, and providing superior features will contribute to E-Merkato's ability
to carve a niche in the digital marketplace landscape.
● Scalability: The project's scalability is crucial for long-term success. A robust
technology infrastructure that can handle increased user traffic, seamless integration with
additional services, and potential expansion to other markets contribute to the project's
feasibility and long-term sustainability.

Overall, the feasibility of the E-Merkato project hinges on a meticulous evaluation of market
conditions, technological readiness, stakeholder engagement, regulatory compliance, financial
considerations, and a strategic approach to competition and scalability.

Target beneficiaries of the system

The E-Merkato system is designed to benefit various stakeholders within the Ethiopian
marketplace, providing tailored advantages to each:

● Sellers:
○ Enhanced Visibility: Sellers gain increased visibility for their products through the
digital platform, reaching a broader audience beyond the physical constraints of
traditional markets.
○ Efficient Transactions: The system facilitates streamlined transactions, whether
through a pay-per-good model or a monthly subscription, allowing sellers to
manage their inventory and sales more effectively.
○ Marketing Opportunities: Sellers can leverage targeted advertising and
promotional services to enhance the visibility of their products, leading to
increased sales opportunities.
● Buyers:
○ Convenient Shopping: Buyers experience the convenience of a virtual
marketplace, eliminating the need to navigate congested physical markets.
○ Access to Information: The system provides buyers with comprehensive
information about products, enabling informed purchasing decisions.
○ Flexible Account Options: Buyers can choose between a limited version at no cost
and a premium version for a one-time fee, tailoring their experience to suit
individual preferences.
● Delivery Entities:
○ Transparent Pricing: Those engaged in delivery services benefit from a
transparent pricing model, paying a fixed rate per kilogram loaded onto their
trucks.
○ Efficient Logistics: The system supports efficient logistics by integrating delivery
services, ensuring timely and reliable transportation of goods.
● Economic Growth and Employment:
○ Local Business Empowerment: The E-Merkato system contributes to the growth
of local businesses by providing a digital platform for increased visibility and
sales.
○ Employment Opportunities: The project has the potential to generate employment
opportunities, particularly in the digital and logistics sectors, contributing to
 economic development.
● Government and Regulatory Bodies:
○ Digital Transformation: E-Merkato aligns with the government's push for digital
transformation, showcasing Ethiopia's readiness to embrace modern technological
solutions.
○ Regulatory Compliance: The system, by adhering to regulatory standards, ensures
compliance with e-commerce and digital payment regulations, fostering a healthy
business environment.

In essence, the E-Merkato system aims to create a symbiotic relationship, benefiting sellers
through increased business opportunities, buyers through convenience and choice, delivery
entities through streamlined logistics, and contributing to broader economic development and
digital transformation initiatives in Ethiopia.

Cost of project

The cost of the E-Merkato project would depend on various factors, including the scale of
development, technological requirements, marketing efforts, and operational considerations.
Without specific details on these aspects, it's challenging to provide an exact cost. However, a
comprehensive budget would typically include expenses for:

● Development and Infrastructure: This encompasses the costs associated with building
and maintaining the digital platform, including software development, hosting, and
technical infrastructure.
● Marketing and Promotion: Budget for marketing efforts to create awareness, attract
sellers and buyers, and promote the benefits of the E-Merkato platform.
● Personnel and Operations: Costs related to hiring and retaining skilled personnel,
operational expenses, and ongoing maintenance of the platform.
● Compliance and Legal: Budget for ensuring compliance with regulatory requirements,
legal fees, and any necessary licenses or permits.
● Customer Support: Allocating funds for customer support services to address queries,
provide assistance, and ensure a positive user experience.
● Research and Development: Budget for ongoing research and development to stay
abreast of technological advancements and continuously improve the platform.
● Contingency: Including a contingency fund to address unforeseen challenges or changes
in project scope.
 Cost

Development and Infrastructure

Marketing and Promotion

Personnel and Operations

Compliance and Legal

Customer Support

Research and Development

Contingency

Total

Risks & contingencies

The development and implementation of the E-Merkato project, like any venture, involves
certain risks. Identifying these risks and having effective contingency plans in place is crucial for
the project's success. Here are potential risks and corresponding contingencies:

1. Technology Risks:
○ Risk: Technical glitches, system failures, or cybersecurity threats.
○ Contingency: Regular security audits, robust backup systems, and collaboration
with cybersecurity experts to minimize and address potential technical issues.
2. Market Adoption:
○ Risk: Slow user adoption due to reluctance in transitioning from traditional
markets to a digital platform.
○ Contingency: Implementing a comprehensive marketing strategy, providing
incentives for early adopters, and conducting awareness campaigns to highlight
 the benefits of E-Merkato.
3. Regulatory Compliance:
○ Risk: Changes in e-commerce or digital payment regulations.
○ Contingency: Regular monitoring of regulatory updates, maintaining open
communication with regulatory bodies, and having a legal team to promptly adapt
to any changes.
4. Competition:
○ Risk: Increased competition from existing or new digital marketplaces.
○ Contingency: Continuous market analysis to identify and respond to competitive
challenges, focusing on unique features, and maintaining a customer-centric
approach.
5. Financial Risks:
○ Risk: Unforeseen budget overruns or financial constraints.
○ Contingency: Establishing a detailed budget with contingency funds, closely
monitoring expenditures, and having a financial management plan to adapt to
changing financial circumstances.
6. User Experience:
○ Risk: Poor user experience leading to dissatisfaction among sellers and buyers.
○ Contingency: Continuous user testing, feedback loops, and regular updates to
enhance the platform's usability and address user concerns promptly.
7. Logistics and Delivery Challenges:
○ Risk: Issues related to delivery services, such as delays or damaged goods.
○ Contingency: Establishing clear guidelines for delivery entities, providing
tracking mechanisms, and implementing a robust customer support system to
address delivery-related concerns.
8. Economic and Political Stability:
○ Risk: Economic downturns or political instability affecting the business
environment.
○ Contingency: Diversifying revenue streams, conducting scenario planning, and
having contingency plans in place to adapt to changing economic and political
conditions.
 9. Data Privacy and Security:
○ Risk: Breach of user data or privacy concerns.
○ Contingency: Implementing stringent data security measures, compliance with
data protection regulations, and having a crisis management plan in case of a
security breach.

By proactively identifying these risks and implementing effective contingency plans, the E-
Merkato project can navigate challenges more effectively, ensuring its resilience and long-term
success. Regular monitoring, adaptability, and a proactive approach are key to mitigating risks
and ensuring the project's sustainability.

Conclusion

In summary, the E-Merkato project emerges as a transformative force set to redefine the
landscape of Ethiopian marketplaces. With a keen emphasis on transparency, accessibility, and
efficiency, this digital platform addresses the inherent challenges experienced by traditional
markets, notably the iconic Mercato. The project's feasibility is grounded in a meticulous
analysis of market dynamics, technological readiness, and a strategic approach to stakeholder
engagement. By offering a flexible pricing model that accommodates the diverse needs of
sellers, buyers, and delivery entities, E-Merkato positions itself as a catalyst for economic
growth, local business empowerment, and employment opportunities. As it unfolds, the project
signifies not just a shift in commerce but also a pivotal moment in Ethiopia's embrace of
technological progress, symbolizing the nation's readiness for a digital future and a more
connected marketplace.